>> the street is coming around increasingly to the view we are going to get a double barrel 50 hikes. >> the fed is going to tighten as much as they need to ticket the inflation narrative under control. >> what i see in this yield curve is a soft landing scenario. >> you are going to see the impact of the flatter curve. >> the uncertainty impact is enormous in everything. this is "bloomberg surveillance." jonathan: live from new york city, good morning, good morning. this is "bloomberg surveillance." alongside tom keene and risa from up it's, i'm jonathan ferro -- lisa abramowicz, i'm jonathan ferro. a hope for a breakthrough between russia and ukraine in the last 20 four hours, had think it much both sides in the last few hours, pouring cold water over that. tom: what we see in moscow,

there is a set of headlines, it is real simple, russia walks it back. washington walked it back with a vengeance yesterday afternoon. did you see that equity market yesterday? jonathan: what a run. some big news -- moves for big tech as well. tom: there may be a short cover. i'm not fancy enough to know that stuff, but i will say this. what has caught gimmick characteristics, there is an acceleration to these moves, the bear grew says it is an up rally within a bear market. time will tell. jonathan: david kostin with goldman, i will catch up with him. some of this is a short covering move and we can discuss that. tom: so is he still in a baritone? jonathan: no. he still has a decent year and price target. in the face of what we's -- what we've seen in the yield market, lisa, -- lisa: i feel every time tom says

the bears out there he is basically looking at me. tom: i'm looking at the bramhall cama. lisa: what we are looking at right now is a figure of what do we do with the haven trade? is it stoxx? a lot of people are wondering if apple is better than cash at this point, given the fact they can raise prices if they have pricing power, and how much does that become the justification for the latest leg up? jonathan: tk, go on. tom: that is classic. i have to get that -- i mean, come on? apple is better than cash? lisa. lisa: this is what you hear from people. what is the hedge for inflation at a time where you are seeing selloff at the fastest pace on record? i understand your point, which is you cannot be as number with apple shares. and perhaps you are seeing people go to stoxx because where also they going to go? tom: jon, this is the idea of, where you hide given that linkage of inflation into

nominal gdp? the only answer is growth equity. jonathan: we are talking about a relative trade, elective to what? relative to cash, relative to bonds. at some point you think about an absolute trade. because inflation starts to bite. these numbers out of europe are really concerning. close to double-digit inflation growth. the number we are about to see from germany, i would have to say the ecb is going to get nervous. tom: jon, the people of america, i don't think, really understand the cultural, the bundesbank, feel of anything above 2% above the norm, which is a 4% number. jonathan: and a fee basis points over two made them nervous. now look at us. tom: when is the next ecb meeting? jonathan: not long way.

tom: i think we need team coverage in frankfurt. jonathan: you want to go to frankfurt? tom: yeah. jonathan: it is the worst place to go for lunch. if you can find a restaurant to go to lunch in frankfurt, tom, i will go with you. i can never find one. i ask the locals and they shrugged their shoulders. futures, down .2% on the s&p. not going to apologize to frankfurt. [laughter] tom: you are 100% correct. jonathan: yields up a couple of basis points on tents. crude up 3%. lisa: amid this backdrop of what is going on with ukraine, if the war will end, we really have to sit on this employment market in the united states. 8:15 am ahead of the payroll numbers. how much do we see jobs being added at that 400,000 pace people are expecting?

adp march employment change comes out. we are looking at an unemployment rate, 3.8%. how much does the federal reserve because the unemployment rate to rise as they tighten financial conditions? how much are -- how much of people concerned about that at a time when people are counting on the labor market to keep this momentum to avoid hard landing? at 10:30 we have an exclusive interview with thomas barkan, speaking with michael mckee. he will be talking about that yield curve we have been seeing, with the inversion we saw yesterday. do they care? is it an irrelevant metric? kansas city fed president esther george is going to be speaking at 1:00 p.m. how much are they looking at that 50 basis point rate hike at the next meeting as a given? also we get the eia crude inventory report. the push-pull of supply-demand is incredibly important at a time when you do have russia really in question right now.

how much can the u.s. increase supply, and how quickly are people drawing down inventory at the time we are still talking about a recovery from the pandemic? jonathan: we have an opec meeting soon as well. lisa: tomorrow. it will be interesting to see how they address russia, how they talk about increasing input, especially after our interview yesterday where they are saying, look, we judge everything in we are being prudent. jonathan: see if they last longer than 13 minutes this time. thank you, lisa. 11-day winning streak for apple. the longest winning streak since 2003. seema shah joins us now. what do you make of this rally in tech in the face of what is happening in the bond market? seema: i think a lot of it is covering, but there is still that fundamental story. although there is some upward movement and bonds, it is probably near the top.

a strong balance sheet does trade pretty well. from the market perspective, although we have dialed down our risk, -- [indiscernible] tom: the arched textbook of the 1940's, we came up with the language of trend, intermediate trend, long-term trend -- whatever trend you want to use. are we in a bear market? if this is -- is this an intermediate bear trend within a bull market? seema: i think it is quite a bear market. what is the upside from here? i don't think it is that much. maybe the s&p 500 you can eke out 10% more gains. not only is there a geopolitical crisis going on that can shift at any moment, but then you have the fed hikes, which are moving. you have had very high inflation, which means consumers

are going to start feeling a struggle. for us it is prudent to dial down risk. the risks are just too great at the moment. lisa: to go at a little bit existential, what does it mean to be risky at a time when cash is a depreciating asset checkup this is why i was talking about apple or some of these haven stocks. how much do you buy into that kind of argument? seema: i think there is a lot in there. inflation is going to eat that away quickly. we are still looking for those inflation hedges within that risk matrix. there are parts, such as mega-cap attack, which looks safe. i think for the bond market, that hedge, where are you going to go? it is still a commodity basis, what you do have to think in that way of relative trade, and, where else is that cash? jonathan: april 13 is the date

in my diary, j.p. morgan earnings. is the outlook getting better for earnings or getting worse? seema: i think for the time being, i think q1, we have to avoid getting too negative about q1. the numbers are still robust. i think it is the second half of the year we start to see some of that slowdown coming through. we are going to be looking at costs and margins. where are the pressure points coming through? i think q1 could be a robust number. it is when you get to the second half that some of those concerns start to come to the surface. jonathan: thank you. seema shah of principal global investors looking ahead to earnings season. the onshore covering is the exodus from bonds yielding equity buying. more upside pain as possible given low hedge fund positions and bearish sentiment, but

post-the big leg up in rates the shift will turn to earnings. tom: was it julian emanuel with us that says, they are 9% earnings growth this year? that is terrible. there is a lot of systemic risks out there. there is the pandemic and all. i'm looking at the drawdown right now on a small index of standard and poor's 500. it is a shocking negative .3%. i have trouble identifying a bear market when i look at a log weekly chart. jonathan: i'm looking ahead to something else next week, a hearing planned by the house commerce committee and the big energy players are attending it. this, going into earnings season, this with crude around $100 a barrel. this is going to be absolutely fascinating. lisa, that is most-watch. lisa: especially because there is another hearing that was

scheduled, and a lot of the oil executives backed out. basically their feet are going to be held to the fire for possibly juicing prices are passing on too much of the increases in costs to consumers. how much do lawmakers move back from that and try to support them if they need to produce more oil? tom: jon, excel i off the pandemic bottom is only up to hunt a 35%. all they have to do is come up with a drilling plan. jonathan: according to a person familiar with the matter, your other names, have an energy, exxon, bp, chevron, shell, and maybe even pioneer attending as well. that is most-watch tv. april 6, just around the corner. one. tom: they should have gotten john tucker on deck. jonathan: just trying to make a move here, tom. down about .3% -- i know, he is getting excited about next week.

i'm with you, tom. it is exciting. this is bloomberg. ♪ lisa m.: keeping you up-to-date with news from around the world, i'm lisa mateo. the kremlin says there has been no breakthrough in talks with ukraine. a spokesman says work needs to be done after a meeting in turkey skeptical members of nato are evaluating whether russia's promise to scale back military operations is a turning point. or simply a tactical shift. it is one of the biggest cryptocurrency attacks ever. hackers stole about $600 million from a blockchain network connected to the popular axi infinity online game. they targeted what is known as the road and bridge and drained tokens in two transactions. the breach was not discovered for six days. the u.s. trade chief says it is time to ditch the old playbook when it comes to china. katherine tai says the u.s. should forget about trying to change china's behavior and instead take a defensive posture

toward the world's second-largest economy. in remarks prepared for a congressional hearing, tai blasted china for not living up to commitments. opec is expected to rebuff calls to replace lost russian oil. russian oil exports have plunged by .25% since the invasion of ukraine. the 23 nation group led by saudi arabia will probably ratify plans for another modest production increase and it meets tomorrow. global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i'm lisa mateo. this is bloomberg. ♪

pres. biden: i don't read anything into it until i see what their actions are. we will see if they follow through on what they are suggesting. in the meantime we are going to keep strong the sanctions. we are going to continue to provide the ukrainian military with the capacity to defend themselves. and we are going to keep a close eye on what is going on. jonathan: distrust and verify, the approach of this administration to russia right now. from new york city, this is bloomberg futures roundabout .25 percent lower on the nasdaq 100.

down .4%. yields higher by a basis point or so. curves steeper after going into inversion yesterday. not all of the excitement for the best part of about 25 seconds. inflation data out of germany in about 40 minutes. i have had a lot of restaurant suggestions for frankfurt. i think we offended a few people. tom: i am shocked. jonathan: what i will do instead of apologizing is, we will make the trip to frankfurt and do a tour of restaurants. tom: madame lagarde can get us a reservation. jonathan: how many times have a been and how many times have we failed to find a decent place to get some lunch? tom: a short lunch is an hour and a long lunch is three hours. lisa: doubling down? [laughter] what about caps? tom: we are going to do the sports report at the end of this hour. right now emily wilkins, and she

knows if you are in l.a. this time of year, there is one trip east of san francisco on the nevada border, mammoth mountain, with the most expensive gas prices on the planet. $6.49 per gallon. emily, don't tell me about speaker pelosi and mammoth mountain. tell me about washington and mammoth mountain. how is gas going down? emily: a gallon of gas is at the top of mind for every politician in washington, d.c. right now. if you are a democrat it is worrying you, because you have a midterm election coming up, and americans are not happy. we are starting to see democratic leaders start to talk about what if any legislation they can wind up moving to reduce gas prices. you are hearing a lot -- i was talking with lawmakers yesterday. do mention a lot of those oil and gas companies, that they really think they are doing things with prices, that they are jacking them up, that they are keeping them out officially high. that is part of what the hearing next week is going to be getting

into. they are also looking at other measures. you have heard senators mention things on biofuels. this is something lawmakers realize they need to focus and double down on. tom: dear, president ford, i enlist as an inflation fighter in -- an energy saver for the duration. i will do the very best i can for america with inflation now. is that where we are at, emily? emily: when you talk about inflation, both sides have dug in on their talking points. republicans say they are going to be spending less money than the democrats currently have. when you talk to democrats, they try to move the conversation away from inflation could they know that is something that is going to hurt them in the upcoming elections. they say what americans really want is to have their cost savings. we are going to find ways of lowering prescription drug prices. have a bill thursday that is going to cap the price of insulin at the five dollars per month.

that is the sort of thing democrats are trying to pivot too, saying, look, we cannot bring that inflation number down by stamping our fingers, but we can save americans elsewhere. tom: lisa, the only way to bring inflation down is to slow down the economy. lisa: that is how i was -- that is where i was going to go. how we spend the report for the month of march. how much is the white house looking for a really strong number to say, look at how great everything is, versus signs that perhaps some of the dynamism that has driven inflation is cooling a bit? emily: when it comes to job numbers this is not something democrats have really held onto tightly. they have used them as trying to argue the case that the economy is not doing as bad as the inflation numbers might seem, but they know those inflation numbers are absolutely an issue. i'm interested to see if the white house is going to tie this in at all to that covid-19 funding bill that is currently being debated in the senate.

they wanted to get those millions more out there for treatment related to covid, for preparedness if another variant comes along. so far that legislation has been stalled. we have not seen too much movement at this point. you wonder if a weaker job numbers going to lead the biden administration to spin it in a way to my saying, look, we need to be cognizant of covid-19, it is out there, congress, where is that funding? jonathan: emily, thank you. tom, looking ahead to friday. adp, 450,000 is the estimate. tom: i don't know what to do with adp. it does kickoff what is a very early report. again, it is the first friday of the month, and correctly that is april 1, but often it is delayed a week. this is a really early report, and i would say just as importantly it dovetails onto the ism numbers. jonathan: futures at the moment

down .25% on the s&p, down .3% on the nasdaq. we will talk with pedro garvey of ing in a moment. tell me what is happening with the international space station and russia's role in this big effort. tom: they don't care about sanctions, they don't care about ukraine. it is about getting people home safely. we are doing this now in russia with two cosmonauts and an astronaut from the united states of america. what is important is they do the land landing in kazakhstan, just how the russians do it, and it is of great importance. i have always been uncomfortable with this. the idea of landing in water is somewhat comfortable. i know i am wrong on that. but that is the russian distinction, jon. jonathan: can you go through how the u.s. and russia have worked get together -- worked together recently? tom: this has been a group

effort not just involving russia, but within space e.u. and members of the world community. everybody has climbed on board. i think the biggest problem here is we underestimate in our romance for apollo 13, and at that time the technology advancements -- you see that with musk, but the big thing here is the idea of the technological advancements that have come from a global effort, not just a nasa effort. jonathan: and russia's role in all this. prime minister boris johnson speaking. inconceivable to relax russian sanctions if there is a cease-fire. prime minister is saying what we all thought yesterday. ultimately even if there is a cease-fire it is inconceivable to relax sanctions. tom: stephanie baker's great article today, absolutely definitive on sanctions makes it clear johnson leads the way. jonathan: futures right now down

.25% on the s&p. later this morning we get adp data in america. payrolls friday just around the corner. before we get there, some inflation data out of germany expected. we will break that down and what you can expect shortly. from new york, this is bloomberg. ♪

jonathan: about two hours away from the open. we are running through the price action. tom: it is kazakhstan. the helicopters coming in. a huge plume of dirt. jeff bezos and elon musk are doing this landing in texas and other points. if there is a wind that comes up instead of landing in kazakhstan, they may land in macedonia. let's go to the report and dovetail it in. portugal two, north macedonia, zero. jonathan: the only reason i am still speaking is because i am paid to.

tom: where else can you go from kazakhstan to newcastle? jonathan: nowhere else and with nobody else for that matter. let's get back to the market. futures negative on the s&p 500. we are looking to snap it, softer by one quarter of 1%. down about 0.4%. into the bond market, 30. a little bit of an inversion yesterday. we backed away from that. the curve is deeper with a 10 year yield a little bit higher. 10's of around about one. the moves in germany are amazing. the two year yield closed out at negative 50 basis points. we are higher just like that. some really interesting inflation data around the corner. will we have basic handle in germany or in europe in the next couple of months? the hope that it would fade is

not matched by the data we are seeing out of europe at the moment. tom: it is clear those numbers are unimaginable. is fiscal expansion worldwide? you will have a huge impulse of money involved. jonathan: the euro-dollar is one to watch. intuitively, we all think this way, is that if inflation is too high, the ecb starts to do something they have not done in 10 years which is hike interest rates. you start to think about a stronger euro. bank of america came out this morning on this show and was not talking about 115, 120. he said 105 and he said anything the ecb does will be outdone by whatever the federal reserve does. ultimately, central-bank action into weakness means a weaker currency, not a stronger one. lisa: that is an important distinction at a time where he expects the ecb to hike rates and it will not matter given the

fact that stagflation concerns are on the table and much more in europe than the u.s.. jonathan: i cannot believe tom went from kazakhstan to north macedonia. lisa: can you really not believe that? jonathan: just a dig at the national football team. tom: helicopters were on the ground now in kazakhstan. romaine: the longest winning streak in the s&p 500 looks like it may come to an end. we are talking about apple's 11 day run. shares only down 0.4% in the premarket so we will see what happens. that could turn around. most of the other big ones in the s&p are waiting. keep in on them on those names. that will be a big determinant as to whether we end up seeing some green later in the session. despite the big run that apple has had, there are 30 plus other companies in the s&p 500 that

have rallied harder than apple over that time. in is up 18% -- micron is up 18%. energy -- devon energy on pace for a 30% gain. it could add another percentage point to that based on premarket movement. keep an eye on the adr with chinese tech companies. investors seem to think that regulators are easing and then they get a reminder that they are not and the chinese government is saying they could crackdown on the livestreaming services. bilibili down about 3%. tom: let's be honest about it. it is not going well. who puts them out of their misery? romaine: the dog? tom: not the dog, the company. [laughter]

jonathan: we should wrap up this segment quickly. you want to put down dogs, tom? tom: who is going to put chewy out of their misery? romaine, thank you so much. padhraic garvey here to save us right now. head of ing. garvey always writing smart notes and talks about how we are making peace with higher yields. i love that phrase. how do we come to grips with higher yields? padhraic: we have to go higher still. there is a lot of room here between where yields have paste and where inflation is. this is an incredible period right now. it is a great opportunity for central banks to move into that space and the pressure is on for them to match what the market has done.

the market is not finished yet. it looks like this market can at least have a go at 3%. in the longer term, that is something similar. one of the things to look for is as we are on the way up and it is remarkable how fast the curve is so early in the rate hiking cycle. as we are on the right -- on the way up, we are already talking about the way down again. tom: is that an appropriate conversation? are we getting way out front? padhraic: both are appropriate. going up makes sense. central banks not want to have rates at zero. the fed does not. they need to look at themselves and ask questions about whether or not it makes sense to have rates where they are. there is an opportunity to move rates clear of zero. it will interesting -- it will be an interesting to see if they take it. every time the central bank rises rates, they peaked for seven or eight months and then they are good again. it makes perfect sense we are

talking about an uptick in rates from the fed. it makes sense we are talking about rate hikes because that is what has happened time and time again over numerous cycles. lisa: a lot of people are looking at what the transition mechanism is of these rate hikes, of these higher yields and they keep looking at credit markets as being really easy and absorbing a lot of the rate hikes with some of the credit cushions comprising. how long can that maintain? how much can junk bonds remain a haven for many investors? padhraic: it has been a tough year for credit. we started out this year with pressure on credit. it has morphed into a classic core bond market selloff. credit has been a bystander over the past couple of weeks. if you look at the big picture, the springs are wider. there is pressure for the spreads to go wider because credit will begin to worry about the eventual slowdown in the

economy. it is still a widening pressure. curtis -- total returns on credit are still worse than total returns on government bonds this year. lisa: when does it become a financing pressure given the fact that so many of these companies have extended maturities and do not have to refinance for a long time? padhraic: it has been very difficult until recently, especially for high yield. it has eased over the past couple of weeks. the market has taken it well so far. what i'm not seeing at the moment is a frantic dash for the need for cash. last year, the next phase was supposed to be an m&a phase. there was a pause on that but there is no issue in terms of financing. this market does not desperately need a fully functioning primary market. jonathan: padhraic garvey of

ing financial markets. deutsche bank just put out a note. i will put that on my twitter in a moment. the market continues to really after the curve. in all six cases they look over, it took another three to over 25 months for the market to reach its peak. on average, the s&p 500 returns 19% from the day of the curve inflection to its next peak. that is from deutsche bank this morning. tom: that is out there. it is in the zeitgeist. again, it is not that i am pushing against the gloom. i am pushing against the certitude of analysis given how unusual these times are. and not only the news of ukraine and the rest of it, but the makeup of sectors, the separation of the s&p 500 into relative winners.

what percentage of the s&p 500 is cratered? it is a big number. jonathan: there are some big moves and that is the snapback we have seen of some of the tech names. they were badly beaten up particularly at the start of the year. that was the story of january. this massive correction and big move higher in yields and the breakdown of these techniques. lisa: and the fact that they have rebounded so much, you wonder how representative the stock market is of the economy and whether it is the least representative of the actual underlying economy than it has been years given the fact that apple is 8% of the s&p and 11% of the nasdaq. we are talking about some kind of reflection of economic trajectory and the u.s. or are we looking at apple? jonathan: just hearing from another governing council member from the ecb, too early to say whether the ecb would lift rates in 2022. it is likely that there will be a rate hike this year. asset purchase is no longer needed for the economy. it feels like when you listen to

this commentary out of the ecb, there is something like six to nine months behind the conversation we were having at the federal reserve. wind it down and it will not be wound down for the ecb until the third quarter. lisa: how much do they start to talk about those rate hikes as a likelihood and do they realize they are getting behind the curve and more interestingly, watch the euro. is there a prospect of a rate hike or does it weaken because they are behind the curve? jonathan: inflation data 20 minutes away. we need to talk about washington. we can do that with gregory valliere of agf investments. looking forward to that conversation shortly. from new york city with tom keene and lisa abramowicz, i am jonathan ferro. this is bloomberg. ♪ lisa: keeping up-to-date, i'm lisa mateo. the cost of living for consumers

has gotten worse. prices rose at the fastest annual pace since 2011 reported by the british retail consortium . the war in ukraine is accelerating inflation. price inflation was two present this month. the official rate is already above 6%. keeping you up-to-date with news from the u.s., the capital of kyiv remains under threat despite promises to scale back military operations. the pentagon called the russian move a repositioning, not a real withdraw from the area around the ukrainian capital. moscow is likely to focus on taking control of two eastern provinces. u.s. investigators are headed to china to help determine what caused the china eastern line boeing 737 to crash. the group includes experts from boeing, the faa, and the national transportation safety board. the jet plunged from its cruising altitude of 29,000 feet. three key indicators of the russian oil industry declined in

the second half of march according to data by bloomberg. the average crude output dips below 11 million barrels per day. the delivery to the nations refineries were down 11% and experts -- exports plunged by 1/5. many of russian oil traditional customers are looking elsewhere. more than half of americans may have never had the coronavirus and scientists wonder whether those who have avoided it might actually be immune altogether. experts say studying those who have not yet caught covid may offer clues on how to attack it. global news 24 hours a day on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in over 120 countries. i am lisa mateo. this is bloomberg.

announcer: from the world of politics to the world of business, "balance of power" weekdays. this is bloomberg. >> we always keep the door open for dialogue and that is

sometimes the beginning of an end but i would be very skeptical when i hear what they are talking about, that ukraine is willing to be neutral, but also wants guarantees from some of the other countries. jonathan: kay bailey hutchinson there. ukrainians talking about a prospect of a meeting between leaders. the russians saying they would cut back operations around ukraine's capital and international skepticism, even from the russians themselves. the kremlin, no breakthrough in the talks. much work remains. tom: there is no question that was the lead headline and not much market reaction. life goes on. a quick image of the reality of

the space station returning to earth with two russians and an american and maybe a quiet symbol in this terrible war of life going on. i believe this is one of the russian cosmonauts. a little bit of sun glare on the land in kazakhstan. one glimmer of hope within this terrible war. zero glimmers of hope in washington. gregory valliere joins us, chief policy strategist at agf with a must-read morning note. it is amazing mr. valliere twisted over to his study of progressives. jonathan: we have to investigate whether this president goes for a second term. greg, have you made a call on that? gregory: we are a little early, but i think he is a one term president. i think the democrats take a severe beating in november. not over ukraine, but over urban crime and inflation. after this beating in november, i think the party will panic and they will begin to ask the question do we want to have a president whose second term

would end when he turned 86 years old? i think that is a dealbreaker. jonathan: who makes that call? gregory: he does. jonathan: exactly. gregory: he is a pro. he has been around. i think he makes that call. i think he realizes that it is time for fresh blood in the party. tom: a very important point. he has to move to the center. how does the center receive the ball? how do the center democrats handle the coming months of this battle? gregory: i was a little surprised yesterday that his budget did not get a few more compliments from the center. he is going to spend a lot more money on defense, more money on police, and even more money on border security. and he did not get any congratulations all for a clear moved to the center. lisa: given your projection that this will ba.1 term president

and -- this will be a one term president, does that mean that any fiscal spending and expansion of the budget is off the table? what other policy prospects are you removing from likelihood over the next six to 12 months? gregory: a really good point. any kind of new tax hike is out of the question. we are not going to get that. joe manchin said that overnight. secondly, the rate of increase on spending will slow. god forbid, spending will drop. that will not happen. but the rate of increase will slow and that is still another all of branch to the center. lisa: an olive branch to the center, but it comes at a time when people are worried about a recession. how much does this shape what kind of response that would be if there was a material slowdown in the next 12 months as a lot of people in the market are expecting? gregory: there are some things you can do to stimulate the

economy. maybe he will do something on student loans. maybe there will be more gasoline tax breaks. i think you will see that in a lot of states. maybe there will be pressure on the fed to ease up, to take their foot off the brake. but there is no panacea here. tom: give us the calendar now. for so many, including myself, for so many viewers and listeners, it is almost april in a midterm year. frame april, may, june, july, and beyond after labor day. gregory: they are on vacation a lot. they take a lot of time off. the idea that we will get a new tax bill is so complicated, i think that is unlikely. they will just do the basics, the budget. the big wildcard will continue to be ukraine. if we should have a miraculous ending to the ukraine on the battlefield, maybe that helps biden. but on so many key issues from

afghanistan to inflation to urban crime, biden is in real trouble. jonathan: let's talk about where that trouble can come from. it is not just about an unwillingness to shift toward the center. it is how to energize the progressives. congresswoman ocasio-cortez came out with a big complaint. how does that shake things? gregory: biden should realize, the democrats should realize that the progressives have utterly failed on all of their agenda. no defund the police, no medicare for all, no wealth tax. the list goes on and on other things they have failed on. the idea that biden should try to ingratiate himself without faction to the party makes no sense. he has to move to the center and stay in the center. jonathan: here is another problem with the party is that most outsiders, commentators like yourself, will turn around and say this is a situation. he was meant to go down the middle and he went too far to

the left. within the party, you have progressives saying he did not go far enough to the left. they are not on the same page of all. when you compare them to the republicans, there is a fringe group in the republicans that a lot of people do not like and they are taking the party in the wrong direction, especially for republicans who have been members of the party for a long time. you are on the same page in the way that the democrats will not be when we get to the end of this year. gregory: no, i don't. it is a really good point. i think that the biggest risk for the republicans is that they overplayed their hand on issue after issue. gang rights, abortion, a wide range of things and we see more scandals erupting around trump. i think that the biggest enemy for the republicans is themselves. they could be self-inflicted wounds. jonathan: gregory valliere, a really important final point, of agf investments. the risk for both parties,

particularly for the republicans. tom: the present registered -- the percent of registered republicans in the state of california, that never used to be in the 30's and remember the day it became 29% and that was a shock. i have it published here at 24%. that is five divided by 29 as the decline in the last couple of years and i can do that on the bloomberg terminal. i can do the quick math and the answer is a 17% decline in registered republicans over the last four or five years. jonathan: what does that indicate? if you were a republican in california, would you vote? tom: that could go either way. that is an important point. i am suggesting that the calculus, this dynamic is not a normal midterm election. that would be my point. jonathan: a long year ahead. futures down 0.2%, down one

third of 1% on the nasdaq. in five minutes, we will get data out of germany, some inflation data, and it could be a bigger number than expected. from new york on tv and radio, this is bloomberg.

>> the market is still assuming that the fed will be hiking interest rates very aggressively. >> the trajectory for this year is strong. they are very eager to frontload rate hikes. >> if we are able to stave off recession in the u.s., you will get that earnings growth. >> no one thinks we could get too bearish. >> i think they will continue to go on. announcer: this is "bloomberg surveillance" with tom keene, jonathan ferro, and lisa abramowicz. tom: good morning, everyone. a most interesting 8:00